DAMAGES - Causation of loss - Proof of counterfactual - Sale of land transaction - Vendor's solicitor negligently drafted section 32 statement required under Sale of Land Act 1962 - Solicitor failed to attach certificate disclosing growth areas infrastructure contribution liability - Deposit paid by purchaser to vendor - Purchaser sought to rescind contract of sale on grounds of failure to supply information in section 32 statement and claimed repayment of deposit - Purchaser's claim against vendor settled on reasonable terms - Vendor partially repaid deposit to purchaser and retained the remainder as part of settlement - Vendor sought to recover from negligent solicitor deposit repaid to purchaser - Whether error in distinguishing Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 - Whether vendor must prove counterfactual that the purchaser would have entered into the sale of land contract but for solicitor's negligence - Leave to appeal granted - Appeal dismissed.

DAMAGES - Causation of loss - Proof of counterfactual - Whether error in failure to draw inference from established facts and circumstances about causation because of failure of vendor to call evidence from purchaser's director - Where witness is hostile to vendor - Whether incorrect question of causation identified - Leave to appeal granted - Appeal allowed.

Sale of Land Act 1962, ss 32, 32K; Wrongs Act 1958, ss 44, 51, 52.

Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, discussed and applied.

PART A: INTRODUCTION 1

PART B: LEAKES' APPEAL 3

PART C: CROSS APPEAL 34

1. In April 2018, the applicant, Leakes Road Property Development Pty Ltd ('Leakes'), agreed to sell to Leakes Rise Pty Ltd ('the purchaser')[1] a plot of land at 1212 Leakes Road, Rockbank, Victoria ('the land') for the sum of $17.55 million.
2. As the land was located in a growth corridor, its sale or development triggered a liability to pay a Growth Areas Infrastructure Contribution ('GAIC') in an amount exceeding $1.6 million. Leakes had become liable to pay the GAIC when it acquired the land some months earlier, but had opted to defer payment.
3. The respondent, Mr Jean-Francois Brasse trading as Rowson Brasse & Co ('Brasse'), was retained by Leakes to act as its solicitor in the transaction. Among other things, Brasse was instructed to prepare the contract of sale and section 32 statement (otherwise known as a 'section 32 statement'), as required by s 32 of the Sale of Land Act 1962 ('Act').
4. Brasse prepared a contract of sale and section 32 statement. However, he neglected to attach to the section 32 statement a certificate showing the deferred GAIC liability as required by s 32 of the Act.
5. The purchaser executed the contract of sale and paid the deposit of $1.755 million. However, a year later, on 21 August 2019, the purchaser purported to rescind the contract of sale on the basis that Leakes had failed to attach to the section 32 statement a certificate disclosing the deferred GAIC liability. The purchaser declined to complete the purchase of the land.
6. Leakes served a notice of default requiring the purchaser to remedy what it asserted was a breach of the contract of sale by settling the sale transaction within 14 days, failing which the contract of sale would come to an end. Leakes subsequently purported to terminate the contract of sale on the basis of non-performance by the purchaser.
7. On 2 October 2019, the purchaser commenced proceedings against Leakes in the Trial Division of the Court to recover the deposit of $1.755 million. Leakes joined Brasse as a third party, claiming damages for negligence in his preparation of the section 32 statement.
8. On the second day of the trial, following judicial mediation, Leakes and the purchaser entered into a settlement agreement whereby Leakes repaid the purchaser $815,881 of the $1.755 million it held as deposit and retained the balance of $939,119.
9. Following its compromise with the purchaser, Leakes amended its claim against Brasse, seeking damages in the amount of $815,881, being the sum that it paid to settle the purchaser's claim against it ('settlement sum'). In the alternative, Leakes sought the repayment of its costs thrown away and liabilities incurred by reason of its entry into the contract of sale.
10. In the proceeding below, Brasse admitted negligence in failing to disclose the GAIC liability in the section 32 statement. However, he disputed his liability to pay damages for the partial loss of the deposit. He pleaded that the purchaser would not have entered into the contract of sale (and therefore would not have paid the deposit) had it been aware of the GAIC liability.
11. In seeking damages in the amount of the settlement sum, Leakes relied on the decision of the High Court of Australia in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd.[2] Leakes contended that the reasoning of the majority in Unity Insurance meant that it did not have to prove that the purchaser would still have entered into the contract of sale had the GAIC liability been disclosed in the section 32 statement. It submitted further that, even if it did bear such an onus, the facts and circumstances in evidence before the trial judge meant that the onus was discharged.
12. Brasse argued that Unity Insurance did not apply in the manner contended for by Leakes and that Leakes was limited to recovering the loss of the commercial opportunity represented by the contract of sale, discounted for risk. In respect of the claim for damages represented by the settlement sum, he contended that Leakes had failed to prove that he caused this loss, that is, that without his negligence, the purchaser would still have entered into the contract of sale.
13. The judge held that Leakes' claim for recovery of the settlement sum was a recognised category of loss and damage.[3] However, for the settlement sum to be recoverable, Leakes needed to establish the counterfactual, that is, that the purchaser would have entered into the contract of sale had Brasse not been negligent and disclosed the GAIC liability in the section 32 statement.[4] In coming to this view, the judge considered and distinguished Unity Insurance.[5] The judge further concluded that Leakes had not satisfied the evidentiary onus to establish the counterfactual.
14. As to an alternative claim for damages representing costs of the sale transaction thrown away, his Honour held that some of those costs were recoverable, but that those amounts had to be offset against the part of the deposit that was retained by Leakes.
15. The judge therefore concluded that Leakes was not entitled to recover any amounts in damages from Brasse, notwithstanding Brasse's negligence. However, Brasse was ordered to pay Leakes' costs of the purchaser's claim on an indemnity basis.[6]
16. In a cross-appeal, Brasse seeks leave to appeal the costs order made against him.
17. For the reasons that follow, we have concluded that:

(a) in the substantive appeal, the application for leave to appeal is granted and the appeal is allowed; and

(b) in the cross-appeal, the application for leave to appeal is refused.

Growth Areas Infrastructure Contribution ('GAIC')

1. The GAIC is a one-off contribution payable to the Commissioner of State Revenue in respect of the sale or development of land located in defined contribution areas. The GAIC scheme, which was introduced in 2009 by the Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill, seeks to levy and collect 'monetary contributions in certain growth areas for the provision of state infrastructure and associated costs in those areas'.[7]
2. The GAIC was introduced to support the expansion of Melbourne's urban growth boundary. In the second reading of the Bill, the Treasurer explained:

Land that is brought within the urban growth boundary, and which is zoned and developed for urban purposes increases significantly in value. This value increase reflects the fact that the land will be developed in the future and the expectation that it will be serviced with key infrastructure and services necessary to support new, vibrant urban communities.

...

The GAIC model will ensure that the benefits of land being earmarked for urban development are balanced by requiring the people reaping those benefits to make a fair contribution towards the provision of the state infrastructure necessary to support new development in growth areas. This will help ensure Melbourne continues to grow as a well-planned and sustainable city.

1. The Treasurer described the relatively simple scheme for the imposition of the GAIC as follows:

The bill will apply the GAIC at a rate of $80 000 per hectare for all land currently within the existing urban growth boundary that has been brought within that boundary since November 2005 and is zoned for urban development, and $95 000 per hectare for land that is brought into the urban growth boundary in the future. Each of these contribution amounts will be indexed over time with an appropriate construction index to be determined by the Treasurer.

The growth areas infrastructure contribution is to be a once-only charge, payable on the first 'GAIC event' to occur in relation to particular land. GAIC events relate to dutiable transactions relating to land, such as a sale or transfer of land, the issuing of a statement of compliance for a plan of subdivision of land, or the making of an application for a building permit for development. There are a range of exclusions to the general circumstances of the GAIC events set out in the bill. For example, an application for a building permit for a single dwelling and for building work less than $1 million are excluded matters.[8]

1. Thus, s 201S(1) of the Planning and Environment Act 1987 ('PE Act') provides that, subject to certain exceptions, a '[GAIC] is imposed in respect of the first GAIC event to occur in relation to any land in the contribution area'. Relevantly, the 'occurrence of a dutiable transaction relating to land in the contribution area' is a 'GAIC event'.[9] For the purposes of pt 9B of the PE Act, 'a dutiable transaction' includes the transfer of an estate in fee-simple.[10]
2. Section 201S(2) provides that a GAIC may only be imposed once in respect of any land in the contribution area.
3. Where the GAIC event is a dutiable transaction relating to land in the contribution area, the person liable to pay the GAIC is the transferee in respect of the dutiable transaction. In the case of a transfer of land, this is the purchaser of the land.[11] However, a purchaser can elect to defer payment of the GAIC until:

(a) the issue of a statement of compliance relating to a plan of subdivision of all or any part of the land; or

(b) the making of an application for a building permit to carry out building work on all or any part of the land.[12]

1. The amount of GAIC payable is calculated on a per hectare basis at a rate specified each year by the relevant Minister.[13] The GAIC must be paid to the Commissioner of State Revenue.[14]
2. Pursuant to s 201UB of the PE Act, if a GAIC may be payable in respect of land, the Victorian Planning Authority must apply to the Registrar of Titles for a notification to be recorded on a folio of the Register. On receiving such an application, the Registrar of Titles must, without charge, record a notification on each folio of the Register relating to that land indicating that a GAIC may be payable in respect of the land.[15] Such a notification is known as a 'GAIC recording'.[16]

Sale of Land Act 1962

1. Part II, div 2 of the Act is headed 'Section 32 statement'. Section 32(1) provides:

A vendor under a contract for the sale of land must give to a purchaser, before the purchaser signs the contract, a statement signed by the vendor that contains the matters and attaches the documents specified in this Division.

1. Matters that must be included in a statement given to a purchaser prior to the purchaser signing a contract for the sale of land include financial matters in respect of the land,[17] insurance details regarding the land,[18] matters affecting the use of the land (such as easements, covenants or other similar restrictions affecting the land),[19] notices given in respect of the land,[20] the particulars of any building permit issued,[21] information relating to any owners corporation,[22] and, relevantly, GAIC details.[23] Where there is a GAIC recording in respect of the land, s 32G(2) requires the attachment of certificates or notices, including 'any certificate of deferral of the liability to pay the whole or part of a [GAIC] imposed in respect of the land'.[24]
2. Under s 32K, a purchaser may rescind a contract for the sale of land in specified circumstances. Thus, where a vendor 'fails to supply all the information required to be supplied to a purchaser, either in a section 32 statement or attached to the section 32 statement'[25] or 'fails to give a purchaser a section 32 statement signed by the vendor before the purchaser signs the contract for the sale of land',[26] the purchaser has the right to rescind the contract.
3. However, s 32K(4) provides the vendor with a statutory defence:

Despite subsection (2) and (3), the purchaser may not rescind a contract for the sale of land if the court is satisfied that -

(a) the vendor has acted honestly and reasonably and ought fairly to be excused for the contravention; and

(b) the purchaser is substantially in as good a position as if all the relevant provisions of this Division had been complied with.

1. Section 32L makes it an offence for a vendor to knowingly or recklessly supply false or incomplete information in a section 32 statement or any certificate, notice, policy or other document attached to the section 32 statement that is required to be given under the legislation.

1. Leakes acquired the land on 1 March 2018. The following day, it lodged an application to defer its GAIC liability in respect of the land.
2. On 20 April 2018, the purchaser delivered an offer to acquire an option from Leakes to buy the land for $17.55 million. The offer was prepared by the purchaser, and provided for an option that could be exercised until 21 May 2018. As a term of the offer, the purchaser promised 'to pay the Growth Area Infrastructure Contribution (GAIC) and other levies, taxes, and fees associated with Land, insofar as those liabilities are referable to the Settlement Period'.
3. Leakes accepted the offer and the parties executed the option deed. The purchaser paid Leakes $100,000 for the option.
4. Leakes retained Brasse as solicitor to act in the transaction. Brasse was retained to redraft the option agreement as a put-and-call option (rather than a unilateral option), to draw the required contract of sale and prepare the section 32 statement. He was also to attend to execution of the documents and act in respect of the completion of the sale.
5. Brasse duly negotiated the terms of the put-and-call option agreement with the purchaser's solicitor, Mr Bartalotta, and negotiated and prepared the contract of sale to be used when the option was exercised.
6. On 11 May 2018, Brasse obtained from the State Revenue Office ('SRO') a certificate pursuant to s 32G(2) of the Act, which recorded a deferred GAIC liability of $1,632,196.36. However, when he prepared the contract of sale and section 32 statement, Brasse neglected to include the certificate recording the deferred GAIC liability. Instead, he included two copies of the land tax statement. The box that was required to be marked if there was any certificate of deferral of the liability to pay the whole or part of a GAIC was also left unchecked. This meant that the section 32 statement annexed to the contract of sale did not comply with s 32G of the Act.
7. The contract of sale negotiated between the parties contained Special Condition 20, whereby the purchaser agreed to be liable for all GAIC and to indemnify Leakes against such liability. Brasse engaged in telephone negotiations and discussions with Mr Bartalotta in respect of the documents.
8. On 16 May 2018, Brasse and Mr Bartalotta discussed the put-and-call option agreement and the contract of sale. A file note made by Brasse records the following:

We discussed the Special Conditions in the Contract. He says that they are all in order except that we need to deal with Special Condition 19.

He explained that the Purchaser has an issue with funding and that the purchaser's funder will not advance funds without a fully executed contract. He is seeking to leave the option fee at the same amount of about $100,000 and the payment of $1,655,000 within 7 days of exercise of option when contract will be signed.

Discussed GAIC and GST. Clarified that outgoings from date of contract. GAIC is okay and I need to leave GST as is because of long settlement and occupation of property.

I told him that I would get some instructions to change the option fee and Special Condition 19 but will leave all other special conditions unchanged.

1. Special Condition 19 concerned the payment of the deposit. Special Condition 20, which contained the purchaser's obligation to pay the GAIC, remained untouched.
2. On 21 May 2018, the purchaser and Leakes executed the put-and-call option agreement with the contract of sale attached. On 25 May 2018, the purchaser paid Leakes a further $100,000.
3. On 31 July 2018, the purchaser's solicitor, Mr Bartalotta, advised that the purchaser intended to exercise the option, but asked for an extension of time to 21 February 2019 to pay the next instalment. Leakes rejected that request.
4. On 3 August 2018, the purchaser exercised the put-and-call option and executed the contract of sale. Mr Bartalotta forwarded the executed documents to Leakes.
5. The contract of sale provided for a deposit of $3,510,000 to be paid to Leakes, made up of two payments of $1.755 million. On 9 August 2018, the purchaser paid the first tranche of deposit of $1.755 million. The second tranche of deposit was payable on 21 November 2018.
6. Between execution of the put-and-call option agreement in May 2018 and its exercise in August 2018, the purchaser entered into 13 'joint venture agreements' with members of the public in respect of 13 lots on an unregistered plan of subdivision of the land. These agreements allowed the 'purchasers' to acquire the nominated lots in return for their contribution to the joint venture costs, which were expressed to include many things, including the GAIC payable on the land.
7. On 13 November 2018, the purchaser sought an extension of time in which to make the next part payment. Leakes agreed to the purchaser paying $800,000 by 21 November 2018 and $955,000 by 20 December 2018.
8. The purchaser paid the $800,000 on the due date, but sought further time to pay the $955,000 which was due on 20 December 2018. The time for payment of that amount was extended to 1 March 2019 on condition that a further $545,000 also be paid on that date. The purchaser paid $1,503,000 on the due date, which included $3,000 in respect of costs.
9. On 27 June 2019, the purchaser's solicitor applied to the SRO to defer the GAIC liability that would become due upon settlement of the sale.
10. On the same day, the purchaser sought a further 12 months in which to complete the purchase of the land.
11. On 8 July 2019, Leakes declined to grant the purchaser further time for settlement.
12. On 11 July 2019, the purchaser's solicitor received a GAIC certificate from the SRO that showed the deferred liability amount of $1,685,192.16 (including interest).
13. On 23 July 2019, the purchaser's solicitor wrote to Leakes, complaining that a soil contamination report had not been disclosed to it despite Leakes knowing about the potential risk of contamination in October 2017. In the letter to Leakes, the purchaser's solicitor sought a five-month, interest-free extension of time to settle the purchase. The purchaser's solicitor claimed that it had become impossible to secure funding due to the inability to determine the extent of the potential site contamination. The additional time to settle the sale would allow the purchaser to investigate the matter further.
14. On 21 August 2019, the purchaser purported to rescind the contract of sale, relying upon the absence of the GAIC certificate in the section 32 statement.
15. On 22 August 2019, Leakes served a notice of default on the purchaser, requiring it to comply with the contract for sale within 14 days.
16. Leakes subsequently sold the land to a different developer for $17 million.

1. On 2 October 2019, the purchaser commenced the proceeding to recover from Leakes all of the payments that it had made, including the deposit of $1.755 million, on the basis that it was entitled to rescind the contract under s 32K(2) of the Act as a consequence of Leake's failure to disclose the GAIC liability.
2. Leakes' defence to the purchaser's claim for the repayment of the deposit was based on s 32K(4) of the Act, that is, that the purchaser was in as good a position as it would have been in had Leakes complied with the Act. This defence was founded on the proposition that the purchaser well understood that it was liable to pay the GAIC when it entered into the contract of sale.
3. To establish the purchaser's knowledge that the purchase gave rise to a GAIC liability, Leakes relied upon a number of matters: the terms of the option agreement drafted by the purchaser's solicitors; the terms of the contract of sale itself; certain communications between solicitors; and the purchaser's history of purchases and sales of other land attracting a GAIC liability. Leakes also relied on the purchaser's entry into the 13 joint venture agreements providing for the apportionment of the GAIC liability on the land.
4. Leakes counter-claimed for damages for breach of the contract of sale. It joined Brasse to the proceeding by third party notice filed on 20 April 2020, alleging that Brasse had breached its duty of care to it in neglecting to attach the GAIC certificate to the section 32 statement, and claiming damages arising from the loss of the sale.
5. In his defence,[27] Brasse admitted that the section 32 statement omitted the GAIC certificate and did not provide particulars of the charge imposed to secure payment of the GAIC. However, Brasse denied that Leakes had suffered any loss or damage by reason of his conduct: if there was loss or damage, such loss or damage was limited to the value of any lost opportunity for Leakes to pursue an alternative sale of the land in or around August 2018, and the transaction costs associated with the proposed sale of the land to the purchaser, which did not proceed to completion. Brasse pleaded that Leakes had not suffered any loss or damage because Leakes subsequently obtained a more favourable sale of the land than it could have achieved in or around August 2018.
6. Following settlement of the claim and counterclaim involving the purchaser, Leakes repleaded its claim against Brasse to claim damages in the amount of the settlement sum. In the alternative, Leakes claimed amounts thrown away as a result of the failed transaction. Brasse did not amend its defence to respond to the repleaded case.
7. The hearing of the third party claim took place over five days.[28] While documents relating to the relevant transactions were in evidence, neither Leakes nor Brasse led any viva voce evidence about the relevant events or their intentions in entering into the transactions.
8. The judge identified the following questions for determination in respect of Leakes' claim against Brasse:

(a) Is [Leakes'] claim for recovery from Mr Brasse of the $815,881 paid to the [purchaser] in compromise of the [purchaser's] claim for damages ('settlement sum') a category of loss and damage recognised by the law?

(b) If [Leakes'] claim for recovery of the settlement sum is a recognised category of loss and damage, in order to establish that the loss was caused by Mr Brasse's negligence, does Leakes have to establish the following counterfactual:

• if Mr Brasse had not been negligent in drafting the s 32 statement and the [purchaser] was on notice of the $1.6 million GAIC liability, the [purchaser] would still have proceeded to enter the contract for purchase of the property, albeit not armed with a prima facie right of rescission under s 32K of the Act ('the counterfactual')?

(c) If [Leakes] does have to establish the counterfactual, does [Leakes'] failure to call direct evidence from the [purchaser] that it would have entered the contract if aware of the $1.6 million GAIC liability mean that [Leakes] has not established the counterfactual?

(d) If it is not necessary for [Leakes] to lead direct evidence from the [purchaser] to establish the counterfactual, does the documentary evidence relied upon by [Leakes] support a finding that the [purchaser] would have entered the contract for purchase of the property, if it had been aware of the GAIC liability?[29]

1. The judge answered the first three questions, 'yes' and the fourth question 'no'. His Honour held that Leakes failed in its principal claim against Brasse because it had failed to establish the counterfactual that the judge identified.
2. The judge also considered Leakes' alternative claim for damages for costs 'thrown away' as a result of the failure of the sale, concluding that while some of those costs were recoverable from Brasse, they had to be offset against the sum retained from the deposit.
3. As a result, Leakes was entirely unsuccessful in the third party proceeding.

1. Having set out the factual background to the proceeding,[30] the arguments advanced by the parties[31] and outlined the primary issues arising for determination,[32] the judge considered whether Leakes' claim for recovery of the settlement sum was based on a recognised category of loss and damage. His Honour found that Leakes had established the nature and extent of its loss as a result of compromising the purchaser's claim against it for the recovery of the full $1.755 million deposit.[33]
2. The judge then turned to consider whether Leakes had established that this loss (the settlement sum) was caused by Brasse's negligence.[34] In so doing, his Honour rejected Leakes' contention, based on Unity Insurance, that there was no need for it to establish the counterfactual that the purchaser would have entered into the contract of sale in the absence of negligence by Brasse.[35]
3. We analyse Unity Insurance in detail below. For present purposes, it is sufficient to note that Unity Insurance concerned a claim by an insured against his insurance broker arising from the broker's failure to disclose to the insurer the insured's previous claims history. As a result of the non-disclosure, the insurer declined to indemnify the insured when his warehouse burned down. The claim against the insurer was ultimately settled for significantly less than the indemnity under the insurance policy, and the insured sought to recover the balance from the broker. In the High Court, the majority (Brennan CJ, McHugh and Hayne JJ) held that the insured could recover from the broker, as damages, the difference between what he received from the insurer in settlement of his claim and the amount he would have recovered under the indemnity policy had there been proper disclosure, providing the settlement was reasonable.
4. The judge considered Leake's reliance on Unity Insurance to be 'misplaced'[36] because in that case

the trial judge at first instance made an express finding addressing the counterfactual of whether the insured would have been able to obtain insurance but for the broker's non-disclosure. McHugh J referred to the following finding of the trial judge:

• His Honour found that the insured would have obtained insurance of the kind obtained from the insurer even if it had disclosed the history of prior claims. This finding was based on the evidence of an expert in the industry who said that, while he was not sure at what cost or on what terms cover would be given, he thought that cover would have been obtained even after full disclosure of the previous claims. The witness said that the premium payable for the policy in those circumstances 'would be a bit higher' than normal. He conceded in cross-examination that not all insurers would have provided cover. However, he thought that a reasonable insurer would have done so. His Honour entered judgment for the insured in the sum of $1,041,166.[37]

1. The judge considered the finding of the trial judge in Unity Insurance to be significant, as it 'constitute[d] a finding of the hypothetical counterfactual of the broker not being negligent'.[38] The judge accepted that the High Court 'did not directly address the issue of causation by reference to a counterfactual analysis'.[39] However,

[i]t was unnecessary for them to do so because of the express finding at first instance that, but for the negligence of the broker, the insured would have been able to obtain insurance without the insurer being armed with a non-disclosure defence under s 28 of the Insurance Contracts Act.[40]

1. The judge concluded that in light of the counterfactual finding at first instance, Unity Insurance

does not support the proposition that, in order to establish that its loss was caused by the third party's negligence, it is unnecessary for [Leakes] to establish that the [purchaser] would have entered into the contract if aware of the GAIC liability.[41]

1. His Honour held to the contrary, stating that it was 'well established' that it is necessary to engage in a counterfactual analysis 'to prove that loss has been caused by negligence'.[42] To that end, the judge considered it necessary to determine 'what the position would have been had the wrongdoer not been at fault in the relevant sense' and 'whether in that event the incident productive of injury or damage would have been prevented or not occurred'.[43]
2. The judge then considered whether the purchaser would have entered the contract of sale in the absence of Brasse's negligence. In considering that issue, the judge addressed two subsidiary questions:[44] first, whether he ought to draw an inference from the documentary evidence that the purchaser would have entered the contract had it been aware of the GAIC liability, in circumstances where Leakes did not call direct evidence from the purchaser; and, secondly, if it was permissible to have regard to the documentary evidence, whether such evidence supported the inference that the purchaser would have entered into the contract for the sale of the land.[45]
3. Following consideration of the relevant case law and the evidence relied upon by Leakes, including evidence of previous transactions entered into by the purchaser's sole director, Mr Alom, and his pre-contractual and post-contractual conduct,[46] the judge concluded that Leakes had failed to establish that the purchaser would have entered into the contract had the section 32 statement disclosed the GAIC liability.[47]
4. His Honour considered that the fact that a separate company under the control of Mr Alom, Homeington Building and Developments Pty Ltd,[48] had previously entered into transactions attracting GAIC liability, did not support an inference that Mr Alom knew about the quantum of the GAIC liability arising from the sale of the land.[49] Likewise, the judge considered the purchaser's entry into the 13 joint venture agreements to subdivide and develop the land that apportioned the GAIC liability did not establish that Mr Alom knew of the GAIC liability attaching to the land.[50]
5. The judge considered the 'strongest evidence' supporting the inference that Mr Alom had knowledge of the GAIC liability to be the file note recording the conversation between Brasse and the purchaser's solicitor, Mr Bartalotta.[51] Given that Brasse, as the author of the file note, was not called to give evidence, the judge determined that 'a Jones v Dunkel inference should be drawn in respect of that failure'[52] that 'his evidence about the file note would not have assisted his case'.[53] However, this inference did not lead to the conclusion that Mr Alom knew of the quantum of the GAIC liability, which would require a further inference that Mr Barlotta relayed the details of his conversation to Mr Alom. The judge considered that there was no evidentiary foundation for this inference.[54] Nor did the purchaser's promises to pay the GAIC liability under both the original option deed and Special Condition 20 of the contract of sale support a finding that Mr Alom know the quantum of the GAIC liability and whether it had been deferred.
6. The judge considered that the evidence of matters postdating the entry into the contract of sale, namely, the obvious difficulties the purchaser was having raising the money to complete the purchase, had 'limited probative value'.[55] While there was evidence that Mr Alom acquired knowledge of the $1.6 million GAIC liability when the deferral certificate was issued by the SRO in July 2019, that was some 11 months after the contract of sale was entered into.
7. Hence, on the primary issues that arose for determination, the judge held that while Leakes had established the nature and extent of the damage it had suffered by compromising the claim by the purchaser for the recovery of the deposit, it had failed to establish that the purchaser would still have entered into the contract of sale had the section 32 statement disclosed the GAIC liability.[56] Leakes had therefore failed to establish that its loss of the settlement sum was caused by Brasse's negligence.[57]
8. The judge then considered Leakes' alternative claim for damages, which had four components:[58]

(a) $454,545.54 in commission paid to a real estate agent upon entry into the contract for the sale of the land to the purchaser;

(b) $75,989.52 in rates and taxes incurred between the purchaser's rescission of the contract of sale and the sale of the land on 17 March 2021 to Waatercove Pty Ltd;

(c) $9,752.47 in legal fees paid to Brasse; and

(d) the costs associated with defending the purchaser's claim for the recovery of the $1.755 million deposit.

1. The claim for damages pertaining to legal fees paid to Brasse was conceded by Brasse.[59] The judge held that the loss occasioned by the payment of the agent's commission was a direct consequence of Brasse's negligence.[60] However, the claim for rates and taxes was rejected as a 'by-product' of Leakes' ownership of the land until its sale in March 2021.[61] Leakes' claim against Brasse for the costs of defending the purchaser's claim was also rejected, on the basis that those costs were incurred by Leakes in circumstances where its claim against Brasse (a third party) was brought in the same proceeding as the one in which Leakes defended the claim brought by the purchaser to recover the deposit monies.[62]
2. Having determined that Leakes had established its loss of $454,545.54 for the wasted agent's commission and $6,816.39 in legal fees it paid to Brasse, the judge then considered whether those losses were offset by either or both of the $939,119 that Leakes had retained from the deposit following its compromise of the purchaser's claim and the value of the benefit derived by Leakes from its use of the $3.555 million that it had retained as part payment for the purchase of the land until the settlement of the purchaser's claim in April 2022.[63]
3. The judge held that the $939,119 retained by Leakes from the deposit should be taken into account in quantifying the damages that Brasse was liable to pay to Leakes.[64] This was because there was no direct evidence that the purchaser intended that the partially retained deposit not be taken into account in reducing the damages payable by Brasse to Leakes.[65] There was no provision in the deed of settlement giving rise to such an inference.[66] The judge concluded that the purchaser had no intention one way or the other and therefore held that Leakes had failed to discharge the onus of establishing that the purchaser intended that the $939,119 retained by Leakes would not reduce Brasse's liability to pay damages to Leakes. That sum should therefore be taken into account in the quantification of the damages Brasse was liable to pay Leakes.
4. As to the $3.555 million of payments retained by Leakes until its compromise of the purchaser's claim in April 2022, the judge accepted that while Leakes did receive a benefit from the retention and use of that money, this benefit did not reduce the quantum of any damages Brasse was liable to pay, as it was part payment for the purchase of the land, which was unrelated to Brasse's negligence.[67]
5. Accordingly, the judge concluded that Brasse was not liable to pay any damages to Leakes.[68] Leakes' primary claim for damages of $815,881 failed as Leakes had not established the causal nexus between its loss and Brasse's negligence.[69] Leakes' alternative claim for damages also failed because its losses of $454,545.54 in agent's commission and $6,816.39 in legal fees were offset by the $939,119 it had retained from the deposit.

1. Leakes seeks leave to raise five grounds of appeal:
   1. The trial judge erred in determining that the decision of Unity Insurance was distinguishable from this proceeding, and that Leakes had to prove that the sale would have occurred in the absence of Brasse's negligence.
   2. The trial judge erred in declining to draw an inference from the established facts and circumstances about causation because Leakes had not subpoenaed the purchaser's director and sought leave to cross-examine him.
   3. The trial judge asked the wrong question of what needed to be shown to establish causation, namely whether it had been shown that the purchaser's director had personal knowledge of the amount and status of the GAIC, rather than whether it had been shown that the purchaser would have entered the contract if the certificate had been annexed.
   4. The trial judge erred in not applying the principles in Jones v Dunkel[70] and Amory v Delamirie[71] when determining as a matter of inference the correct question of causation (on the assumption causation had to be proved), namely whether the purchaser would have entered the contract but for the negligence.
   5. The trial judge erred in imposing an onus of establishing that the purchaser intended that the amount retained by Leakes would not reduce Brasse's liability to pay Leakes' damages and in setting off the amount retained by Leakes against the damages he accepted were otherwise suffered by Leakes.
2. Leakes asks this Court to set aside the orders made by the judge and, in lieu, to order that:

(a) there be judgment for Leakes on the third party claim in the sum of $815,881;[72]

(b) alternatively, there be judgment for Leakes on the third party claim in the sum of $462,361.93;[73]

(c) Brasse pay Leakes' costs of the third party proceeding.

1. Ground 1 is, in substance, that the judge erred in distinguishing Unity Insurance and requiring Leakes to prove that the purchaser would have entered into the contract of sale in the absence of Brasse's negligence, that is, if the GAIC liability had been disclosed in the section 32 certificate.
2. In order to understand the parties' submissions on this ground, it is necessary to set out the critical parts of the decision in Unity Insurance.
3. The facts in Unity Insurance were as follows. The broker, Unity Insurance Brokers Pty Ltd, arranged an industrial special risks policy for the insured, who leased premises for use in its business of selling fruit and vegetables. The policy included coverage for damage by fire to the insured's premises, plant, machinery, stock and contents. Full indemnity under the policy was over $1.72 million. However, the broker failed to exercise reasonable care and skill in arranging the policy, and did not disclose the insured's prior claims history, as required. Following a fire that extensively damaged the insured's premises, the insured claimed on the policy, but the claim was denied by the insurer on the basis that the insured had failed to comply with his duty of disclosure.[74]
4. The insured sued the insurer for $1,720,287.04 for breach of contract and the broker for breaching its duty to exercise reasonable care and skill. The insurer, relying on s 28 of the Insurance Contracts Act 1984 (Cth), contended that it was entitled to reduce its liability to nil because of the non-disclosure. The insured settled his claim against the insurer for $900,000.
5. The claim against the broker was conducted on the basis that the insurer was not entitled to avoid the contract of insurance because of the failure to disclose the prior history, but its liability was reduced under s 28(3) of the Insurance Contracts Act. The broker submitted that the insured had failed to show that he had suffered any loss as a result of the breach of duty because there was no evidence about what the position of the insurer would have been if it had known about the claims history.
6. The trial judge held that the broker's breach of duty left the insured exposed to a real risk of complete failure in relation to its claim against the insurer and that it was reasonable for the insured to have compromised that claim. The trial judge awarded the insured the difference between $1,720,287.04 (the indemnity amount) and the $900,000 that the insured had accepted from the insurer.
7. The broker appealed unsuccessfully to the Full Court of the Supreme Court of Western Australia. It then appealed the decision of the Full Court to the High Court.
8. In the High Court, the broker did not argue that the insured was unable to prove he would still have obtained cover if proper disclosure had been made. Rather, the broker's argument was that the insured could only succeed if he proved that he would have lost in any action against the insurer (such that the insurer would have been entitled to reduce its liability to nil). This was because the broker claimed that the damage was constituted by the difference between the amount recovered and the amount that would have been recovered if the insurer had been sued.
9. The High Court, by majority, dismissed the appeal, holding the insured's recoverable damages to be the difference between what he would have recovered under the policy that the broker ought to have arranged and the amount that he recovered on settlement, provided the settlement was objectively reasonable having regard to the circumstances at the time. In so doing, the High Court rejected the broker's submission that the insured was additionally required to prove what the outcome of the action between it and the insurer would have been.
10. In dismissing the appeal,[75] Brennan CJ wrote separately, but agreed substantially with the reasoning of Hayne J.[76] It is to Hayne J's judgment that we first turn.
11. Hayne J summarised the broker's argument as follows:

It was submitted on behalf of the broker that the insured could succeed in a claim for more than nominal damages for breach of the contract of retainer (and could succeed in its claim for negligence) only if it established that it could not have recovered from the insurer any more than it had obtained by way of settlement. Thus, it was submitted, it was necessary for the insured to prove against the broker the case which the insurer had pleaded against its insured. In this case, it was said that the insured had to prove that the insurer would have been entitled, under s 28(3), to reduce its liability to the insured to nil - on the basis that the insurer would not have undertaken the risk if the insured had made full disclosure. Nothing less than that would suffice, it was submitted, because there was evidence at the trial that, if there had been full disclosure, reasonable insurers would nevertheless have given the cover sought by the insured for a premium only marginally higher than the premium that was in fact charged by this insurer. Thus, so the argument went on, if the insured had prosecuted its claim against the insurer to judgment, the only consequence of the insured's non-disclosure would have been a comparatively small reduction in the amount payable under the policy - a reduction much less than the discounting of the claim by about 40 per cent or 50 per cent that the settlement of $900,000 represented.[77]

1. Hayne J then framed the question arising for determination as follows:

What ... was the damage which the insured suffered? Was it, as the broker contended, any difference between the amount recovered from the insurer and the amount that would have been recovered if the insurer had been sued, to judgment, on the policy? Or was it, as the trial judge and the Full Court held, the difference between the amount recovered from the insurer (if the settlement was shown to be reasonable) and the amount that would have been recovered if the policy issued by the insurer had been enforceable according to its terms?[78]

No question arises ... about whether the damage suffered by an insured which has compromised its claim against its insurer on a policy that is of doubtful enforceability is too remote. The question is what consequences follow if the insured chooses not to prosecute its claim against the insurer to judgment but chooses, instead, to accept some amount in compromise of its claim that is less than would have been payable if the contract of insurance had been enforceable according to its terms.[79]

1. In response to the broker's argument that the need to avoid double recovery was the only significance to be attached to the fact that the claim against the insurer had been compromised or to the amount at which it had been settled, his Honour said:

[T]he broker's breach of obligation caused the insured to obtain a policy that was open to doubt or challenge. The very fact that the policy is open to doubt or challenge may cause loss to the insured. If the doubts are capable of ready resolution without resort to litigation, as for example, by the insured taking the opinion of counsel and providing it to the insurer, comparatively little cost may be incurred but the broker's breach would nevertheless have caused that loss. At the other extreme, however, if the doubts are obvious and irremediable, and the insured could not recover under the policy, the broker's breach would have caused the insured to lose the whole benefit of that policy. The insured suffers loss in both kinds of case - not just the second. And the loss in both cases is caused by the broker's breach of obligation.[80]

The fact that the dispute between insured and insurer may be resolved by agreement does not lead to any different result. The loss suffered by the insured, if the compromise is reasonable, is caused by the broker's breach of obligation. To the extent that policy is to be considered in answering the question whether the breach caused the loss, policy considerations reinforce the conclusion that the breach caused the loss.[81]

1. To require the insured to prove, as part of its case against the broker, the case which the insurer would have mounted against the insured was to prolong litigation and discourage settlement.[82] In Hayne J's view,

the need to encourage settlement of disputes ... suggest[s] that a settlement of the dispute between insured and insurer should be given more significance as between insured and broker than simply identifying an amount which may limit the amount of damages recoverable by the insured from the broker for the broker's breach of duty.[83]

the damages recoverable by the insured should be fixed as the difference between what the insured recovered under the settlement (if it was reasonable) and what would have been recovered under the policy which the broker ought to have arranged (together, no doubt, in an appropriate case, with any other costs or expenses incurred by the insured as a result of the broker's breach and taking account of any extra premium that would have been payable). Whether such a rule would, or may, work injustice to the broker is much affected by what is meant by a "reasonable" settlement of the dispute between insured and insurer ...[84]

1. Following a detailed consideration of the relevant case law and the reasons of the lower courts, Hayne J was 'not persuaded' that the trial judge and the Full Court had erred in finding that the settlement was reasonable.[85] His Honour therefore dismissed the appeal.[86]
2. For his part, Brennan CJ observed that when a claim is met by an arguable defence, it is 'natural and foreseeable' that a compromise might occur.[87] The insured's acceptance of a settlement sum in respect of a claim against the insurer, for something less than full indemnity, was something that had occurred 'in the natural course of events' or 'was in contemplation of the parties' when the broker was engaged, or 'was reasonably foreseeable at the time of the broker's negligence'.[88]
3. According to Brennan CJ, '[a] shortfall below a full indemnity was not so remote from the insurer's breach of retainer or negligence as necessarily to fall outside the area of compensable loss'.[89] The 'critical question' was 'whether the insured's acceptance of a sum less than a full indemnity should be regarded as a result of breach of contract or of negligence'.[90] If the settlement sum was reasonable, 'a shortfall in the amount of the indemnity is, as a matter of common sense and experience, the result of the broker's negligence'.[91] By contrast, if the sum accepted was 'unreasonably low, the insured could not establish that the entire shortfall was the result of the broker's negligence' because the insured is obliged to act reasonably in mitigation of its loss suffered as a result of the broker's negligence.[92] The acceptance of an unreasonably low sum in settlement could not be attributed to the broker's negligence, 'either because the acceptance of such a sum was not a reasonable step to take in mitigation of the insured's loss or because it was not foreseeable that the insured would act unreasonably'.[93]
4. Brennan CJ continued:

When an agent is under a duty to exercise reasonable skill and care in negotiating a contract between the principal and a third party but fails to perform that duty whereby the third party asserts an entitlement to deny the principal's rights under the contract, the damages which the principal who compromises the claim to enforce those rights against the third party may recover against the agent are the difference between what the principal would have obtained from the third party had the agent exercised reasonable skill and care and what the principal could reasonably obtain by compromise with the third party. It follows that, in proving damages, the principal must show (i) what would have been obtained from the third party absent the defendant's negligence, and (ii) that, having regard to any weakness in the plaintiff's claim against the third party caused by the agent's negligence, the amount accepted in settlement was reasonable in the circumstances. [This rule] simply applies to a particular fact situation the ordinary principles governing the assessment of damages in contract and tort.

1. His Honour held that in seeking damages in tort or more than nominal damages in contract, the onus rests on the plaintiff to establish the 'nature and extent of the damages suffered as a result of the defendant's negligence'.[94] The plaintiff must also demonstrate that the settlement sum accepted was, objectively, reasonable.[95]
2. Brennan CJ agreed with Hayne J that there was sufficient evidence to support the findings of fact made by the lower courts that the settlement agreed between the insured and insurer was reasonable.[96] His Honour concluded that the insured was entitled to a full indemnity as against one or other of the defendants and that his acceptance of a settlement sum less than the full indemnity 'left the insured exposed to the risk of litigation against the broker alone, a risk of losing the full indemnity which would have been obtained from one or other defendant had there been no settlement'.[97]
3. For McHugh J, the question on appeal was

whether a plaintiff claiming damages for breach of contract is entitled to damages for loss arising from the plaintiff compromising legal proceedings with a third party where the proceedings arose out of the breach of contract.[98]

1. McHugh J set out the background to the appeal, including the findings of the trial judge that the broker had breached its duty owed to the insured, that it was reasonable for the claim to be compromised and that the settlement sum was reasonable.[99] The trial judge had found that under the policy the insured would have been entitled to over $1.72 million, compared to the settlement sum of $900,000.[100] The trial judge also found that the insured would have obtained insurance of the kind obtained from the insurer even if it had disclosed the history of prior claims.[101]
2. Importantly, McHugh J considered the elements of 'causation and remoteness', noting that to succeed in its claim for the difference between the full indemnity and the settlement amount, the insured had to establish that the difference 'resulted from' the breach of the insurance contract.[102] The insured also had to establish more than that his loss was causally connected with the broker's breach of duty. He had to establish that the loss he suffered was 'the kind of loss which was within the contemplation of the contract breaker [(the broker)] or would have been within the contemplation of a reasonable person in his or her position'.[103]
3. McHugh J found that it was or ought to have been within the reasonable contemplation of the broker that if it failed to perform its obligations with reasonable care and skill, the insured may be placed in a position where he was forced to compromise a claim for indemnity under the policy.[104] His Honour held that once the trial judge found that the settlement was reasonable, it was 'plain' that the difference between the full indemnity and the settlement sum resulted from the broker's breach.[105] McHugh J concluded:

Accordingly, upon the finding in this case that the settlement was reasonable, the insured proved a causal connection between the settlement and the breach of the broker's duty of care that the settlement was within the reasonable contemplation of the broker or a reasonable person in its position. If the case is governed by ordinary principles of contract law concerning causation and remoteness, the insured is entitled to recover the loss claimed.[106]

1. McHugh J considered a number of cases in search of a principle governing whether a plaintiff could recover from the defendant monies paid in settlement of a third party action.[107] Although it was said that there was 'no reported case which authoritatively and persuasively [laid] down [such a] principle',[108] his Honour said:

Whether the claim is in tort or contract, the question whether the plaintiff can recover from the defendant moneys paid in settlement of a third party action depends on ordinary principles of causation and remoteness. That proposition also applies in a case such as the present where the settlement is an element in the calculation of damages.[109]

1. The remaining part of McHugh J's judgment dealt with whether the trial judge's finding that the settlement was reasonable could stand.[110] His Honour determined that it could:[111]

Once the trial judge found that the settlement was reasonable, the basic principles of the law of contract concerning causation and remoteness required the conclusion that the insured was entitled to recover from the broker the sum of $1,041,166.[112]

1. Leakes submits that in Unity Insurance, the High Court set out the correct approach to causation in circumstances where a client is out of pocket in settling a proceeding with a counterparty as a result of negligence by its adviser or agent. Leakes submits that the effect of the majority judgments is that, provided the settlement was reasonable, the client can recover the amount paid or foregone under the settlement, rather than having to establish what the outcome of the action between it and the counterparty would have been had the proceeding not settled.
2. Leakes contends that the judge's holding that an innocent client must show that the impugned contract would have nevertheless come into existence is in conflict with Unity Insurance and that the judge's ground for distinguishing it misreads that decision. This is because the analysis in Unity Insurance treats the compromise itself as the loss.
3. Leakes submits that the facts of Unity Insurance are in almost every respect identical to those in this case and that the majority of the High Court accepted that the proper approach to this type of case was to consider it as one where the negligent conduct had introduced a flaw or uncertainty into the enforceability of a contractual obligation. In that circumstance, the damages that can be recovered have been identified as 'the difference between what the principal would have obtained against the third party had the agent exercised reasonable skill and care and what the principal could reasonably obtain by compromise with the third party'.
4. According to Leakes, in admitting that the settlement was reasonable, Brasse implicitly admitted that 'there were risks either way that the purchaser would or would not have entered into the contract of sale had the GAIC certificate been included in the section 32 statement'. Brasse can therefore no longer advance a position that would render the settlement unreasonable, namely, that the purchaser might not have entered the contract had Brasse not been negligent. Leakes contends that the judge's implicit acceptance of the argument that the purchaser might not have entered into the contract of sale had it known about the GAIC liability meant that Leakes had received monies under the settlement to which it was not entitled and the settlement was therefore unreasonable.

1. Brasse conceded that he breached his duty of care to Leakes by failing to attach the GAIC certificate to the section 32 statement. However, he disputes that this breach caused any loss to Leakes. Brasse submits that where there has been negligent omission, the causal link between the breach of duty and the claimed damage can only be established by means of a counterfactual hypothesis. The claimant must advance an alternative set of facts, assuming the tortfeasor had taken the requisite care and there had been no omission.
2. According to Brasse, the appropriate counterfactual scenario for considering whether he caused any loss to Leakes involved him exercising due care in the performance of his retainer, with the consequence that the section 32 statement would have complied with all statutory requirements and would have disclosed the GAIC liability. It would have bound any purchaser to the contract. Because Leakes' claim relates to the partial disgorgement of a deposit paid under contract, the counterfactual chain of causation leading to the claimed loss requires the purchaser to have entered into the contract.
3. Brasse submits that Leakes did not establish that fact at trial.
4. Brasse submits that Unity Insurance did not establish a rule about causation that in any way departed from the conventional position on causation. Rather, Brasse submits, the question of causation did not arise for consideration in the High Court (nor in the Full Court of the Supreme Court of Western Australia) because that issue was resolved at trial and was not challenged on appeal. Unity Insurance is not about causation, but about quantum of damage.
5. To understand that this is the case, Brasse argues, it is necessary to have regard to the decision of the Full Court of the Supreme Court of Western Australia, being the decision from which the appeal to the High Court was brought. Brasse contends that this is necessary, notwithstanding the High Court's rejection of the characterisation of the loss identified in the lead judgment of Ipp JA, that the loss suffered by the insured was the loss of the chance to make a claim against the insurer without having to face the defence of non-disclosure.[113] Ipp JA examined how the trial was conducted with respect to the loss suffered by the insured. His Honour recorded that the trial judge had found, in effect, that if the broker had made a full disclosure of the insured's prior claim history, a like policy of insurance would have been issued by some other insurer. The trial then proceeded on the assumption that the value of the insured's loss was to be measured by the difference between a reasonable settlement sum and the amount that would have been payable to the insured under the like policy, had there been no non‑disclosure or negligence.
6. Brasse submits that what was in contest in Unity Insurance was not the causation element in the claim made by the insured against the broker. What came before the High Court was the broker's argument that the insured needed to prove that its claim against the insurer would have failed. The High Court rejected the proposition that the insured needed to prove that additional element. In acting upon a settlement if it is reasonable, the High Court was 'simply applying to a particular fact situation the ordinary principles governing the assessment of damages in contract and in tort'.
7. According to Brasse, Brennan CJ identified a principal difference from the present case when his Honour observed that the insured was entitled as against one or other of the defendants it had sued to a full indemnity. That conclusion rested on the foundation that, absent the negligence of the broker, the insured would have obtained a policy of insurance against the risk. In that respect, causation was resolved at trial. As Ipp JA observed:

[T]he learned trial Judge found, in effect, that had the [broker] made a full disclosure of the [insured's] prior claim history, a like policy of insurance would have been issued by some other insurer. Thus, this was not a case such as Gates v The City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 4 ANZ Insurance Cases 60-691; (1986) 160 CLR 1 where the plaintiff was unable to prove that he could and would have entered into policies of insurance of the kind that he believed that he was entering into.[114]

1. According to Brasse, neither the Full Court nor the High Court considered whether there would have been a contract of insurance at all if the broker had made the proper disclosures because that question was resolved at trial. Because that question played no part in the High Court's determination, the decision in Unity Insurance is distinguishable from the present case - as the judge correctly held.
2. Brasse submits further that in the present case, the judge's approach was consistent with two decisions of the High Court concerning proof of causation of loss, one decided before[115] and one shortly after[116] Unity Insurance, with a similarly composed bench. According to Brasse, in each of those cases, the High Court held that a claimant who enters into a deficient transaction because of the wrongful conduct of another will not establish that they lost the value of an alternative bargain unless it is proven that the alternative bargain was available. Unity Insurance said nothing to the contrary.

1. The argument on ground 1 centred on whether, in Unity Insurance, the High Court identified a particular causal pathway for the establishment of loss when a party has had to settle a dispute over the terms of an agreement due to the infirmity of the agreement, it having been negligently prepared or procured by an adviser.
2. As discussed, it is Leakes' submission that the judge's holding that the innocent client must show that the impugned contract would have nevertheless come into existence is in conflict with Unity Insurance, which contains an approach to causation in circumstances where a client is out of pocket in settling a proceeding with a counterparty as a result of negligence by its adviser or agent.
3. We accept the submission advanced on behalf of Brasse that the question for determination by the High Court in Unity Insurance was how the insured's loss arising from the compromise of his claim was to be measured. The High Court had to decide whether the insured's loss was the difference between the amount that he received from the insurer in settlement of his claim and the amount to which he would have been entitled had he established his claim against the insurer, or whether his loss was the difference between what he received on settlement and the amount of the full indemnity under the policy of insurance. The appeal therefore turned on whether the (settled) dispute as between insured and insurer had to be determined within the claim against the broker. The answer to that question was 'no', providing the settlement was reasonable.
4. This does not address the question of causation.
5. We reject the contention that Unity Insurance sets out a distinctive approach to causation in the circumstances described. In Unity Insurance, the question of causation was not central - it remained in the background. However, it is clear from a close reading of Unity Insurance that the judges in both the Full Court and the High Court proceeded on the understanding - based on the expert evidence given at trial - that the insured would have obtained an indemnity policy (either from the insurer or from another insurer) even if his claims history had been disclosed. This meant that he was entitled to claim the amount due under an indemnity policy from one or other (or both of) the insurer and the broker. Thus:

(a) McHugh J made express reference to the finding of the trial judge that the insured would have obtained insurance of the kind obtained from the insurer even if he had disclosed the history of prior claims;[117]

(b) Brennan CJ proceeded on the basis that the insured was entitled to a full indemnity: if the action against the insurer had gone to trial and the insurer had succeeded in denying liability, the insured would have been entitled to obtain full indemnity against the broker;[118] and

(c) Hayne J identified the contest as being whether the insured had to prove that the insurer would have been entitled to reduce its liability to nil under the Insurance Contracts Act, as there was evidence at trial that, if there had been full disclosure, reasonable insurers would nonetheless have given the cover sought.[119]

1. The requirements for establishing causation in negligence are set out in the Wrongs Act 1958 ('Wrongs Act'). Section 44 of the Wrongs Act states that pt X of the Act, which pertains to negligence, 'applies to any claim for damages resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise'. Division 3 of pt X sets out the principles governing causation. Relevantly, s 51(1) of the Wrongs Act provides:

A determination that negligence caused particular harm comprises the following elements -

(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation); and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).

1. Section 52 of the Wrongs Act provides that the plaintiff bears the burden of proof, on the balance of probabilities, of any fact relevant to the issue of causation.
2. In Strong v Woolworths Ltd,[120] French CJ, Gummow, Crennan and Bell JJ confirmed that the identically worded NSW provision[121] was a statutory statement of the 'but for' test of causation: the plaintiff must establish that it would not have suffered the particular harm but for the defendant's negligence.[122] Their Honours referred to the earlier High Court decision of Adeels Palace Pty Ltd v Moubarak,[123] in which French CJ, Gummow, Hayne, Heydon and Crennan JJ discussed the approach to be taken when considering the question of causation.[124] Having regard to the distinct elements of factual causation and scope of liability, their Honours said:

Dividing the issue of causation in this way expresses the relevant questions in a way that may differ from what was said by Mason CJ, in March v E and MH Stramare Pty Ltd, to be the common law's approach to causation. The references in March v Stramare to causation being 'ultimately a matter of common sense' were evidently intended to disapprove the proposition 'that value judgment has, or should have, no part to play in resolving causation as an issue of fact'. By contrast, [the equivalent provision to s 51 of the Wrongs Act] treats factual causation and scope of liability as separate and distinct issues.[125]

It is not necessary to examine whether or to what extent the approach to causation described in March v Stramare might lead to a conclusion about factual causation different from the conclusion that should be reached by applying [the equivalent provision to s 51 of the Wrongs Act]. It is sufficient to observe that, in cases where the Civil Liability Act or equivalent statutes are engaged, it is the applicable statutory provision that must be applied.

Next it is necessary to observe that the first of the two elements identified in [the equivalent provision to s 51 of the Wrongs Act] (factual causation) is determined by the 'but for' test: but for the negligent act or omission, would the harm have occurred?[126]

1. In Wallace v Kam,[127] the High Court (French CJ, Crennan, Kiefel, Gageler and Keane JJ) again emphasised the distinction between factual causation and scope of liability:[128]

The distinction now drawn by [the equivalent provision to s 51 of the Wrongs Act] between factual causation and scope of liability should not be obscured by judicial glosses. A determination in accordance with [the equivalent provision to s 51 of the Wrongs Act] that negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with [the equivalent provision to s 52 of the Wrongs Act].[129]

1. As to the demise of the 'common sense' test, most recently, in Young v Chief Executive Officer (Housing),[130] Gordon and Edelman JJ said:

Although causation was once described in this Court as a concept of 'common sense', it has since, and repeatedly, been emphasised that the concept of common sense should be eschewed when applying the principles of causation.[131]

1. Satisfying the 'but for' test involves identifying the loss suffered and establishing that the negligence in question was a necessary condition for that loss to have occurred. Whether something is a 'necessary condition' of the loss will usually involve consideration of a counterfactual: would the loss have happened had there been no negligence of the kind in question?
2. In Lewis v Australian Capital Territory,[132] Edelman J explained the 'but for' test in the following terms:

[T]he test for causation of loss asks whether the wrongful act was necessary for the loss. The 'but for' or counterfactual approach 'directs us to change one thing at a time and see if the outcome changes'. The change is the removal of the wrongful act. If the loss would lawfully have occurred but for the wrongful act then the wrongful act was not necessary for the loss. The counterfactual approach thus involves a hypothetical question where no other fact or circumstance is changed other than those which constituted the wrongful act.[133]

1. In this case, then, the counterfactual approach involves removing the wrongful act - the act of omitting to include the GAIC certificate in the section 32 statement - to see if the outcome changes. The counterfactual involves Leakes providing to the purchaser a section 32 statement with a GAIC certificate showing the deferred GAIC liability. By law, this was bound to occur before the purchaser executed the contract of sale (remembering that the contract of sale required the purchaser to pay the outstanding GAIC liability). Accordingly, the counterfactual in this case is that the purchaser was given the compliant section 32 statement prior to executing the contract of sale. The counterfactual is based on the purchaser then executing the contract and paying the deposit, having been provided with the GAIC certificate showing the deferred liability.
2. In this hypothetical circumstance, there would have been a non-defective (binding) agreement for the sale of the land, the ground for rescission would have fallen away and Leakes would have been entitled to retain the deposit. But for the wrongful act, Leakes would not have suffered the loss that it claimed.
3. Leakes bore the burden of proving that the wrongful act caused the loss of the deposit.[134] In order to do so, Leakes had to prove that the purchaser would have entered into the contract absent Brasse's negligence.
4. It is true that the immediate and obvious cause of Leakes' loss of the settlement sum was its decision to settle the proceeding brought by the purchaser. The proceeding brought by the purchaser was, in turn, caused - in the sense of enabled - by the defect in the contract of sale. However, the fact that the defect became significant for Leakes only when Leakes was confronted by the purchaser seeking to rescind the contract of sale does not derogate from the need to establish that there would have been a contract of sale had the purchaser been given the GAIC certificate. For the reasons we have given, it is incorrect to identify the defective contract of sale as 'the' cause of the loss. While superficially attractive, a 'common sense' analysis of this kind is inapposite and contrary to authority.
5. That such an analysis is both wrong and inapt is demonstrated by the following hypothetical. Assume that the land was heavily contaminated and that the solicitor neglected to include in the section 32 certificate a soil report showing the nature and extent of the severe irremediable contamination. The purchaser executed the contract of sale in ignorance to the contamination. On subsequently learning of the contamination, the purchaser sought to rescind the contract and recover the deposit. In this hypothetical case, the vendor has a poor chance of successfully defending its failure to comply with the Act, with the consequence that it settles the matter on terms that it retains only five percent of the deposit. On any view, that is a reasonable settlement, reflecting the strength of the purchaser's case. On Leakes' analysis, the vendor would be entitled to recover the balance of the deposit (95 per cent) from the solicitor, whether or not it had established that there would have been a contract of sale notwithstanding the contamination.
6. In our view, in the hypothetical circumstance described, it would be wrong to attribute the loss of the deposit to the failings of the solicitor, whether as a matter of 'common sense' or otherwise. The blame for the loss of the deposit could only be laid at the feet of the solicitor if it could be shown that the purchaser would have entered into the contract anyway. Only then would the solicitor's omission be a necessary condition of the occurrence of the loss.
7. It is true that Unity Insurance contains a number of statements which, on their face, appear to resolve the question of causation where an advisor has compromised the principal's ability to enforce its rights by producing a defective contract.[135] However, as discussed, a careful reading of Unity Insurance reveals the existence of a factual substratum establishing the causal nexus between the wrongful act and the loss claimed, albeit that little, if any, reference was made to it by the majority judges.
8. In any event, the Wrongs Act makes clear what is required to establish causation in negligence, including in this case.
9. It follows that we do not consider that the judge erred in distinguishing Unity Insurance or in requiring Leakes to prove that the purchaser would have entered into the contract of sale in the absence of Brasse's negligence, that is, if the GAIC liability had been disclosed in the section 32 statement.
10. Ground 1 is not made out.

Grounds 2, 3 and 4: The counterfactual - evidence and inference

1. Grounds 2, 3 and 4 challenge the judge's approach to, and findings concerning, the purchaser's knowledge of the GAIC liability for the purposes of establishing the counterfactual.
2. Ground 2 is that the judge erred in declining to draw an inference from the established facts and circumstances about causation because Leakes did not subpoena the purchaser's director, Mr Alom, and seek leave to cross-examine him. Ground 3 is that the judge asked the wrong question about what needed to be shown to establish causation, namely, whether it had been shown that Mr Alom had personal knowledge of the amount and status of the GAIC, rather than whether it had been shown that the purchaser would have entered the contract if the GAIC certificate had been attached to the section 32 statement. Ground 4 is that the judge erred in not applying the principles in Jones v Dunkel[136] and Amory v Delamirie[137] when determining as a matter of inference the correct question of causation (on the assumption causation had to be proved), namely, whether the purchaser would have entered the contract but for the negligence.
3. It is convenient to consider these grounds together.

1. Leakes submits that the judge erred in declining to draw an inference from facts relevant to the counterfactual on the basis that Leakes did not call direct evidence from Mr Alom to establish that he knew the amount of the GAIC liability. It says that there is no general rule against drawing inferences if a witness is not called and particularly not where that witness is known to be hostile. Leakes contends that there is no authority to support the judge's view that a party in its position needs to call a director of the opposing party, Mr Alom, to cross-examine him in order to rebut the evidence that he is expected to give. According to Leakes, a party has never been required to call a witness 'blind' or a hostile witness.
2. Additionally, Leakes contends that Mr Alom's views on the GAIC liability are not 'direct evidence' as those views would have been evidence about something hypothetical and could only ever permit an inferential answer. Citing a number of authorities, including the judgment of Kirby J in Hoyts Pty Ltd v Burns,[138] Leakes submits that the evidence of a witness about what they would have done in an historical counterfactual has repeatedly been deprecated by courts as being of little or no use when compared to the inferences to be drawn from the established contemporaneous facts and inherent likelihoods.
3. Brasse submits that the premise of this ground is false as it is not the case that the judge declined to draw an inference 'because' Mr Alom was not called. Rather, Brasse contends, the judge declined to draw an inference because the evidence did not justify the drawing of an inference. The judge expressly stated that the absence of evidence from Mr Alom did not diminish the strength of the evidence led by Leakes. Moreover, the judge addressed the very question that Leakes said the judge should have resolved, that is, whether the purchaser would have proceeded with the purchase had the GAIC liability been disclosed in the section 32 statement. Furthermore, Brasse submits, the manner in which courts have deprecated the evidence of witnesses as to what they would have done in an historical counterfactual has focused upon the evidence from the person who has suffered the relevant loss (Leakes in this case). Mr Alom had no such 'skin in the game'.
4. As to ground 3, Leakes argues that the judge erred in requiring it to show that Mr Alom knew the amount of the GAIC liability. The judge was prepared to infer that the purchaser's solicitor had been informed of the GAIC amount, but required Leakes to go further and show that the solicitor had informed Mr Alom of that fact. Leakes submits that proof of Mr Alom's knowledge was not the only path to establish causation.
5. In its written case, Leakes set out the elements of evidence that it says in combination answer the question of what the purchaser would have done if furnished with the GAIC certificate prior to executing the contract of sale. According to Leakes, the judge did not address the evidence holistically, as his Honour focused on whether any of the evidence showed that Mr Alom had personal knowledge of the GAIC amount.
6. As with ground 2, Brasse contends that the premise of ground 3 is false. He submits that the judge correctly identified the causation question in the Reasons. Whether the purchaser had personal knowledge of the GAIC liability was a subsidiary fact that affected the resolution of that question, but the question was correctly considered by the judge. According to Brasse, if the Reasons are read as a whole and in context, and particular attention is paid to the framing of the causation question at paragraph 61, it is plain that there was no error.

1. There is an issue as to the extent to which the judge's conclusion that Leakes failed to establish the counterfactual was based on what Mr Alom could have said or known. As submitted by Brasse, the judge formulated the relevant questions correctly.
2. However, we have concluded that the judge erred in giving insufficient weight to the evidence led by Leakes, which took the form of documentary evidence. We consider that the preponderance of the evidence before the judge supported a finding that the purchaser would have entered into the contract of sale had the GAIC liability been disclosed in the section 32 statement. The pattern of negotiation between Leakes and the purchaser (via their respective solicitors), and the conduct of the purchaser more generally with respect to the future use and development of the land, reflected the common understanding that the purchaser, not the vendor, would make the 'one off' GAIC payment in respect of the land:

(a) it was a term of the offer made by the purchaser on 20 April 2018 that the purchaser would pay the GAIC;

(b) it was a term of the contract of sale (negotiated and executed by the purchaser) that the purchaser would pay the GAIC and indemnify Leakes against any GAIC liability (Special Condition 20);

(c) during the course of negotiations, the purchaser's obligation to pay the GAIC was expressly discussed. The purchaser is recorded as seeking amendments to Special Condition 19, but as being 'okay' with Special Condition 20, providing for it to pay the GAIC;

(d) between entering into the option agreement in May 2018 and executing the contract of sale in August 2018, the purchaser entered into agreements with prospective purchasers of parcels of the prospectively subdivided land that required them to contribute proportionately to the GAIC payable on the land. The purchaser's business model for the subdivision of the land and the sale of lots took into account its liability to pay the GAIC. This is also reflected in the feasibility study for the subdivisional development lodged with the purchaser's finance broker;

(e) in August 2018, the purchaser received, via its solicitor, draft documents that clearly showed that the GAIC certificate should have been included, but was not. The purchaser raised no issue about its absence for more than a year; and

(f) consistently with these events and its understanding that it was liable to pay the GAIC, on 27 June 2019, the purchaser applied to the SRO to defer its GAIC liability in respect of the land, which it understood would become due upon settlement in July 2019.

1. In our view, it is highly probative that the purchaser approached Leakes with an offer to buy the land that contained an express promise to pay whatever the GAIC liability was. It must be inferred that the purchaser knew the amount of the GAIC liability or that the purchaser was prepared to assume that liability unseen. Moreover, as the judge observed, the existence of Special Condition 20 in the contract of sale and the recorded discussion between the solicitors as to the purchaser's agreement to the Condition is also highly probative evidence that the purchaser knew that it bore the GAIC liability.
2. The purchaser's application to the SRO to defer the GAIC liability is also significant. Although not argued before us, it represents not only a further indication that the purchaser understood that it was responsible for paying the GAIC, but constitutes an election to affirm the contract of sale despite the absence of the GAIC certificate.[139] The purchaser having elected to affirm the contract of sale in that way, it would be problematic for it to contend that it would not have entered into the contract had it known about the GAIC liability. The evidence that it elected to affirm the contract of sale by an unequivocal acknowledgment that it was responsible for the GAIC liability points firmly the other way.
3. More generally, the arrangements between Leakes and the purchaser were based on the understanding that the purchaser, not Leakes, would be developing the land. The GAIC is essentially a development cost. The purchaser, as a relatively experienced developer, must be taken to have been aware of the GAIC regime, as it forms part of the parcel of laws governing the subdivision of green fields land around Melbourne. It is a well known (and significant) cost of carrying on that form of business. The plan annexed to the certificate of title of the land recorded the size of the land. Armed with this knowledge, the purchaser could readily calculate the GAIC liability.
4. In our view, these factors, viewed in combination, compel the conclusion that the purchaser would have proceeded with the transaction had the GAIC liability been disclosed in the section 32 statement. Accordingly, it was not necessary to call Mr Alom to give evidence of his subjective intentions; nor was it necessary to establish that Mr Alom knew the actual quantum of the GAIC liability. Furthermore, the fact that boxes in the section 32 statement were not correctly ticked or crossed is of no moment.
5. In the circumstances, we are satisfied that Leakes has discharged the legal onus of establishing that there would have been the contract of sale if there had been no negligence, that is, if Brasse had furnished the purchaser with the GAIC certificate. We are satisfied to the requisite standard that the purchaser would have entered into the contract of sale had the GAIC certificate been attached to the section 32 statement.
6. Grounds 2 and 3 are made out. It is unnecessary to consider ground 4.
7. Leakes is entitled to an order that it seeks for the amount of the settlement sum. It will be ordered that there be judgment for Leakes on the third party claim in the sum of $815,881 (plus interest).

Ground 5: Offsetting damages against retained deposit

1. Ground 5 concerns the alternative claim for damages. As the principal claim for damages has been made out, it is unnecessary to consider this ground. Nonetheless, we will deal with it in brief compass.
2. Ground 5 is that the judge erred in imposing on Leakes an onus of establishing that the purchaser intended that the amount of deposit retained not reduce Brasse's liability to pay damages to Leakes and in setting off the retained deposit against the items of expenditure.
3. It will be recalled that the judge allowed damages to compensate Leakes for two items of expenditure incurred as a result of the contract of sale: $454,545.54 for the wasted agent's commission and $6,816.39 in legal fees it paid to Brasse. However, applying the test in The National Insurance Co of New Zealand Ltd v Espagne,[140] his Honour held that Leakes had failed to establish that the purchaser intended that the sum retained by Leakes from the deposit ($939,119) should not reduce Brasse's liability to pay Leakes damages for negligence.

1. Leakes submits that it was entitled to the retained deposit regardless of whether it was entitled to recover the wasted agent's fees from Brasse. According to Leakes, the retained deposit and the damages for wasted fees are not referrable to the same loss and the only connection between them was the judge's finding that both flowed from Brasse's negligence. The settlement sum was a product of the resolution of a dispute over the right to retain the deposit; it was not directed to relieving the loss caused by transaction costs thrown away.
2. Leakes submits that the purchaser inferentially allowed Leakes to retain the deposit because to do so removed the risk that the purchaser might not retain any of it. If not gratuitous, it was certainly voluntary, and it was not made pursuant to any legal obligation. The dispute being settled did not relate to the payment of extra agent's fees and the retained payment bore no relationship to that claim. It was objectively and manifestly independent of the existence of any right Leakes might have against Brasse, because such a right was irrelevant to the transaction. The retained settlement amount was to be enjoyed regardless of whether Leakes was entitled to recover the wasted agent's fees from its former solicitor.
3. Relying on Wollington v State Electricity Commission of Victoria [No 2],[141] Leakes submits that the relevant question is whether the retained deposit was of such a character that it diminished the liability of the wrongdoer. This question is to be answered 'from an examination of the circumstances in which [the deposit was retained]',[142] rather than by it adducing evidence from Mr Alom as to his subjective intentions.
4. Brasse submits that Leakes' argument amounts to the proposition that its loss should be quantified by calculating the costs incurred because of entry into the contract (wasted agent's fees) while ignoring the proceeds from the contract (the partial deposit of $939,119 that Leakes retained). By notice of contention, Brasse submits that Leakes made alternative claims in contract and in tort. In the case of negligent omission, the measure of damages is the amount of money that would put the applicant in the same position as if the tort had not occurred, which, in this case, would produce the same result as for breach of contract. To ignore benefits received under the contract in the assessment of Leakes' loss is to identify an incorrect counterfactual scenario. To place Leakes in the same position as if Brasse had discharged his obligations requires a comparison with actual events, taking into account both detriments and benefits to Leakes of having entered into the contract. The $939,119 received because of entering into the contract must therefore be brought to account.

1. We agree with Leakes that question is to be answered 'from an examination of the circumstances in which [the deposit was retained]', rather than by it adducing evidence from Mr Alom as to his subjective intentions. However, we also agree with Brasse that both the retained deposit and the wasted agent's fees were products of Leakes' entry into the contract of sale. In other words, we accept the proposition advanced by Brasse in the notice of contention. The deposit was paid pursuant to the contract of sale in order to protect Leakes against loss arising as a result of precisely the kinds of expenses in question, should the sale not proceed. In our view, Leakes is not entitled to both retain the deposit (or part thereof) and be compensated for costs thrown away as a result of the sale not proceeding. Both the benefit of the deposit and the expenditures are referrable to the contract of sale. It is incorrect to say that the dispute that was settled did not relate to the payment of agent's fees or that the retained deposit bore no relationship to that claim.
2. Ground 5 is not made out.

PART C: CROSS APPEAL

1. The cross-appeal concerns only order 3 of the costs orders made by the judge.[143] That order requires Brasse to pay Leakes' costs of the purchaser's claim in the court below on an indemnity basis, to be taxed in default of agreement.
2. The judge concluded that Brasse should pay Leakes' costs of defending the purchaser's claim on an indemnity basis. According to the judge, this would 'achieve an appropriate measure of compensation', in circumstances where Leakes 'is an innocent victim of the negligence' and it incurred costs in defending a claim that was 'directly attributable' to Brasse's negligence.[144] Contrary to Brasse's submissions, the judge held that it would be 'inapt' to describe such an order as having the effect of conferring a windfall gain upon Leakes.[145] Instead, such an order would, in terms of costs of defending the purchaser's claim, put Leakes in the position it would have been in but for Brasse's negligence.[146]
3. Brasse seeks to raise two grounds of appeal:
   1. The judge's costs discretion miscarried by erroneously finding that Leakes had incurred costs, caused by Brasse's negligence, for which it was entitled to be compensated.
   2. The judge should have found that Leakes had been more than fully compensated for the costs incurred in defending the purchaser's claim.

1. Brasse submits that his negligence cannot be said to have caused compensable damage unless Leakes' costs of defending the purchaser's claim exceeded $477,757.07, which is the amount that Leakes gained by reason of the contract of sale.[147] Brasse argues that to allow this part of the costs ruling to stand 'would provide Leakes with a gain' at his expense and 'wrongly compensates Leakes for loss when it has made a net gain'. According to Brasse, the indemnity costs order made by the judge did not involve a proper application of the indemnity principle or the assessment of loss.
2. Leakes submits that the Court's costs discretion 'is not fettered by any assessment of whether a party was better off by reason of a settlement than it "should" have been, or better off overall by reason of the negligence'. It says that it was embroiled in legal proceedings that would never have arisen had Brasse exercised reasonable care. It expended legal costs to mount a reasonable defence, which led to a reasonable settlement of the purchaser's claim. Moreover, Leakes submits, Brasse relied upon that settlement to exonerate himself from the losses that Leakes had sustained.

1. This Court has stated on multiple occasions that appeals from costs orders should be regarded as exceptional and that an appellate court should exercise particular restraint in interfering with the costs orders made by a trial judge.[148] This is because a trial judge 'is almost always best placed to assess in whose favour and to what extent the discretion as to costs should be exercised', particularly following a long and complex trial.[149] As Callaway JA explained in Hanlon v Brookes:[150]

It is almost invariably the case that the judge at first instance is better placed to deal with the costs after a long trial and counsel seeking leave ordinarily has a difficult task. The test is not whether we should have exercised the discretion in the same way as his Honour did but whether there was or were a ground or grounds on which he could reasonably do so.

1. However, an appellate court may, in an appropriate case, disturb costs orders made by the trial judge. For instance, the court may interfere with a costs order where there has been a demonstrable 'error in principle' or 'manifest misapprehension of fact'.[151]
2. In our view, there has been no error in principle or manifest misapprehension of fact and the application for leave to cross-appeal must be refused. The judge correctly identified the applicable principle in his costs ruling that the purpose of a costs order is to indemnify or compensate the person in whose favour it is made. This purpose provides a guide to the exercise of the costs discretion. His Honour then exercised his discretion on a reasonable basis, namely, that it was Brasse's negligence that caused Leakes to incur costs in defending the purchaser's claim against it.
3. We observe that Brasse has cited no authority for the proposition that costs ought not be awarded unless the court is satisfied as to the existence of a net detriment once settlement amounts are taken into account.
4. Leave to cross-appeal will be refused.

1. Grounds 2 and 3 are made out. Leakes established that its loss was caused by Brasse's negligence.
2. Accordingly, leave to appeal will be granted, the appeal upheld, and Orders 1 and 2 of the orders made by the judge on 30 August 2022 dismissing the third party claim and ordering Leakes to pay Brasse's costs will be set aside. In lieu, it will be ordered that there be judgment for Leakes on the third party claim in the sum of $815.881 plus interest on that sum at the rate prescribed by the Penalty Interest Rates Act 1983, as calculated from 7 April 2022.

1. I have had the advantage of reading in draft the reasons of Emerton P and Kennedy JA. Unlike their Honours I would uphold ground 1. My reasons, which assume a familiarity with the joint reasons, follow.
2. In the result I would join in the orders proposed by the other members of the Court.

1. Leakes was involved in tripartite litigation in the Trial Division of this Court:

(a) As against the purchaser, Leakes was a defendant in an action to recover the payment of a deposit paid by the purchaser pursuant to a contract of sale that the purchaser purportedly rescinded;

(b) Leakes made a claim against Brasse by way of a third party claim.

1. When Leakes' third party claim was originally formulated,[152] which preceded the settlement with the purchaser, the third party claim had the following elements:

(a) It was an action brought in contract and, alternatively, in negligence.[153]

(b) Leakes asserted that the purchaser alleged that it was entitled to rescind the contract of sale under s 32K of the Sale of Land Act 1962 and made a claim for the return of monies paid to Leakes (effectively the return of the deposit).[154]

(c) Leakes contended that, if the purchaser was found to be entitled to rescind the contract and to be repaid the deposit, then Leakes had suffered loss, particularised as being the difference between the purchase price under the contract and the market value of the property as at the date of rescission.[155]

(d) Leakes also sought an indemnity from Brasse in respect of so much of the purchase price as it was required to repay to the purchaser.[156]

1. In his amended defence to the third party claim,[157] Brasse admitted a duty of care and a retainer (albeit in a somewhat different form to that pleaded).[158] Brasse pleaded that if Leakes suffered loss it was limited to:

(a) the value of any lost opportunity to pursue an alternative sale of the property in or around August 2018; and

(b) the transaction costs associated with the proposed sale to the purchaser.[159]

1. Brasse measured the lost opportunity by reference to the market value of the land at the time of the contract (August 2018) and the amount received on subsequent sale. Brasse alleged that in fact there was no loss because Leakes subsequently obtained a more favourable price than it could have achieved in or around August 2018.[160]
2. Brasse further pleaded that the alleged breach did not cause Leakes to lose the contract of sale because either Leakes could rely on s 32K(4) and hold the purchaser to the contract or, if it could not, the breach did not cause the loss because if Brasse had not breached his duty or retainer and had in fact included the GAIC information, the purchaser would not have entered into the contract.[161]
3. As things transpired, the claim as between Leakes and the purchaser settled and Leakes agreed to repay $815,881, representing a partial return of the deposit paid by the purchaser. Further, Leakes sold the property to another person for effectively the same purchase price, such that there was no lost opportunity to sell to another purchaser.
4. Following the settlement with the purchaser, Leakes amended its third party claim against Brasse.[162] In the amended statement of claim, Leakes pleaded the settlement, which it said was a reasonable compromise, and re-pleaded its loss as being the sum of $815,881 that Leakes was 'obliged to pay to the [purchaser] pursuant to the compromise'.[163] Alternatively, it sought the costs thrown away and the liabilities incurred by virtue of its entry into the contract of sale.[164] Particulars of these costs thrown away were provided, the largest of which was the payment of the real estate agent's commission of around $450,000.[165]

1. There are two important matters of context that need to be mentioned.
2. First, Leakes' claim against Brasse was a claim based on economic loss brought in both contract and tort. It is necessary to distinguish between the damages awarded by the court and the injury and other foreseeable consequences suffered by the plaintiff.[166] In an action for negligence causing economic loss, it is necessary to identify the interest infringed by the negligent act.[167] Proper identification of the interest infringed is necessary in order to determine when the cause of action accrued and what acts or omissions may be said to have caused that damage.
3. Generally, in the case of a negligently-prepared contract, loss and damage does not occur on the signing of the contract - that is to say, it does not occur on entry into the transaction.[168] That holds true even though, as a matter of ordinary experience, the contract may be regarded as less valuable or impaired when compared to a contract that does not have the defect that arose from the alleged negligence. For that reason, an action in negligence is not complete when the contract is prepared or when the client relies on it and executes the contract with a counterparty. At that point, there would also be no loss in contract.
4. It follows from principle that, at the time of the execution of the contract of sale, any loss suffered by Leakes was merely contingent. The purchaser may have elected to affirm the contract regardless of the non-disclosure of the GAIC or may have been precluded from relying on the non-disclosure as a basis for rescission by reason of s 32K(4) of the SLA. In either of those events, Leakes would have sustained no loss or damage: there would have been no harm to its economic interests.[169]
5. Second, the claimed liability of Brasse to Leakes arose in the context of a third party claim, which in its terms (as originally formulated) only arose if the contract was validly rescinded and Leakes was liable to return the deposit. In the event that the purchaser was entitled to and did in fact rescind the contract, the contingent loss and damage to Leakes, if any, materialised. That meant that Leakes would only look to Brasse in the event that the purchaser avoided the contract. If that occurred, Leakes sought:

(a) an indemnity from Brasse in relation to any deposit monies that it was required to return to the purchaser;

(b) alternatively, wasted expenses that it had incurred in relation to the sale; and

(c) damages representing the lost sale.

1. As to the third aspect, one way of formulating the loss would be the loss of the opportunity to sell the property to another purchaser at the time of the impugned transaction. For example, in Heenan v Di Sisto and Williams v Pagliuca, the loss claimed was the difference between the sale price under the contract vitiated by the solicitor's negligence and the lower price obtained under subsequent contracts of sale.[170] In a declining market this kind of loss might be significant. Brasse accepted in his defence that he would have been liable for loss of this kind but, on the facts, there was no such loss. By the time that Leakes amended its third party claim against Brasse in light of the settlement, Leakes no longer sought damages representing the lost sale because it had sold the land to another purchaser on no less favourable terms.
2. As to the second aspect, certainly, wasted expenses are recoverable. In Commonwealth v Amann Aviation, the example was given of a client who, relying on his or her solicitors' performance of their contractual obligation to use reasonable care, enters into a transaction with a third party and thereby incurs a loss, so that the client has been put to additional expense that would not have been incurred had the contractual obligation been performed.[171] These burdens are of a kind that were incurred regardless of the enforceability of the contract of sale. They may be regarded as wasted expenditure. A similar analysis would apply in negligence. But for the negligence, the vendor would not have incurred the wasted expenditure and that holds true whether or not the purchaser entered into the contract.
3. Turning then to the first aspect, had the purchaser succeeded in its claim for the recovery of the deposit, Leakes would have succeeded in its claim for that amount against Brasse. In that respect it is important to note that Brasse effectively admitted a breach of his duty. In effect, in its third party claim (as originally formulated) Leakes sought an indemnity from Brasse in the event it was required to return the deposit. That amount would be recoverable because Brasse admitted that he failed to prepare the section 32 statement with proper care and, on the hypothesis that the purchaser could avoid the contract by reason of the non-inclusion of the GAIC information, it would necessarily follow that the omission of Brasse in breach of his duty caused the relevant loss.
4. It is important to observe that Brasse was retained for the purpose of drafting a section 32 statement and contract of sale that would provide an enforceable contract containing both an obligation on the part of the purchaser to pay the purchase price but also to pay a deposit that could be kept by Leakes in the event that the purchaser did not complete the contract. Amongst other things, it was the risk of default by the purchaser that brought the solicitor's duty of care into existence.[172] If the purchaser could avoid the contract by reason of the non-disclosure, the deposit would be repayable and Leakes would thereby suffer harm to its economic interests. The breach of duty would be a cause of this loss.
5. The necessary causal relationship would be established in that case because, had Brasse prepared the section 32 statement with proper care, Leakes would have been entitled to retain the deposit. Its entitlement to retain the deposit in that case would be a function of the role of deposits in the context of the sale of land: in the event that the sale is completed, a deposit is a part payment towards the purchase price of the property, but it is also held as security for performance by the purchaser of the contract and, further, it is provided as an earnest to bind the bargain.[173] Because a deposit acts as an earnest to bind the bargain, a reasonable deposit does not fall within the general rule in relation to the law of penalties: such a deposit can be retained even though it does not bear reference to the anticipated loss of the vendor flowing from a breach of contract,[174] and even if the vendor makes a profit on the resale of the property.[175]
6. On the other hand, had the purchaser failed in its action against Leakes for the recovery of the deposit, the purchaser would have been held to the contract and, relevantly, Leakes would have been entitled to retain the deposit. It might still have an action against Brasse to recover any expenses it incurred but it would not have lost the deposit.
7. It follows that, with the possible exception of the costs of running the action, Leakes would only suffer a harm to its economic interests if the purchaser was entitled to avoid the contract by reason of the non-disclosure of the GAIC information. As between Leakes and the purchaser, the non-inclusion of the GAIC information will either be material - in the sense that it allows the purchaser to avoid the contract with the resultant loss to Leakes - or immaterial - with the purchaser held to the contract and therefore no loss to Leakes occasioned.
8. Seen in this way, the determination of any loss or damage to Leakes, or at least that part which represented the loss of the sale and the liability to return the deposit, depended on the outcome of the litigation between it and the purchaser. In the event that Leakes sustained any loss, it would be inevitable that the loss would have been caused by Brasse's breach of duty because the foundation of the purchaser's success would necessarily be the failure to include the GAIC information in the section 32 statement which, of course, constituted the breach of duty.
9. In short, therefore, Leakes' loss depended on the ability of the purchaser to avoid the contract which, in turn, was tied to the breach of duty by Brasse. In the event that Leakes suffered loss and damage by reason of the ability of the purchaser to avoid the contract, it could never have been in doubt that Brasse's breach of duty caused that loss.

1. As already noted, the action between Leakes and the purchaser was not determined and was compromised. In the circumstances, Leakes agreed to a partial return of the deposit.
2. The judge accepted that Leakes had established that its loss was reflected in its obligation to partially refund the deposit in the sum of $815,881. There is no appeal from that finding. Rather, the focus of ground 1 is whether Leakes was required to prove that the sale would have occurred in the absence of Brasse's negligence in order to establish that the loss was caused by Brasse's negligence.
3. At the time of the settlement, the question whether Leakes would suffer a loss as a result of the sale had not been determined. There can be no doubt that, absent the failure to include the GAIC information in the contract, the purchaser would not have purported to rescind the contract on the basis relied on by it. No other valid basis for the rescission of the contract was identified.
4. In my opinion, the decision of the purchaser to rescind the contract in reliance on the non-disclosure gave rise to the real possibility that Leakes would suffer loss and damage in the form claimed, namely the loss of the deposit. But for the breach of duty by the solicitor for Leakes, the purchaser would not have taken the step that it did. As already observed, at that point the potential for Leakes to lose the benefit of the deposit became a realistic possibility. It may be inferred that, in order to minimise the risk that Leakes would lose the entire deposit, it took the step of reducing the risk by agreeing to a partial repayment. It was for that reason that the settlement was reasonable. As the judge found, and I agree, that constituted loss and damage.[176]
5. This is not a case where the solicitor denied any wrongdoing and was being asked to underwrite a settlement. Once the breach of duty was admitted, and the loss identified, the only issues that were relevant to Brasse's liability were causation and remoteness of damage. In my view, the loss so identified was caused by Brasse's breach of duty. Had there been no breach, the purchaser would not have had a basis to rescind the contract, and Leakes would not have had any reason to repay any part of the deposit which it had received from the purchaser. Further, the loss sustained by Leakes was not too remote but was a natural consequence of the breach of duty. Unity Insurance establishes that, in the circumstances in which it was placed, Leakes could recover the compromise amount provided it was a reasonable settlement.[177] It is not in dispute that it was.
6. The essential inquiry is whether the wrongdoer's breach of duty caused the identified loss. In this case it is the partial return of the deposit. A counterfactual is a tool of analysis that enables the loss to be identified and assists in the establishment of a causal link.[178] That is because, if the loss would have occurred despite the breach of duty, it could not be said that the wrongdoing was an essential factual cause of the loss. While it is true that the absence of the contract might mean that the vendor would never have received the deposit, the inquiry as to causation is not concerned with how Leakes obtained the deposit in the first place. Once the loss is identified, the task is to determine the cause of that loss, not to answer some anterior question as to why Leakes was put in the position to incur the loss in the first place. That is because the counterfactual analysis involves asking the hypothetical question where no other fact or circumstance (such as entry into the contract) is changed other than those which constituted the wrongful act.[179] Further, as the cases referred to above on economic loss make clear, the loss only arose after the purchaser sought to rescind the contract.
7. This is a difficult case because, on one view, the so-called loss is the loss of a benefit of a contract that Leakes may not have had but for the breach of duty. An award of damages for the loss of the deposit, or any part of it, might be seen to resemble expectation loss, rather than reflecting the compensatory principle applicable to an award of damages in negligence.[180] There are two answers to that. First, the economic loss in this case only arose once the purchaser purported to rescind. The question is what the cause of that loss is. Second, it is wrong to see the payment of a deposit solely in terms if it being a benefit under the contract, when in large part it is designed to hold the vendor harmless in the event of non-performance by the purchaser. The loss of the deposit was, in my view, a harm to the economic interests of Leakes. Whatever might have happened in a different scenario, the fact remains that the return of the deposit represents a loss to Leakes. As a factual matter, in my opinion, the loss, being the payment of the settlement sum, was a loss caused to Leakes by the breach of duty of Brasse.
8. Accordingly, the judge was wrong to require Leakes to prove that the purchaser would have entered into the contract whether or not there was disclosure. That step was unnecessary.
9. I would grant leave to appeal and uphold ground 1. As a result, it is unnecessary to consider Leakes' remaining grounds of appeal. If I am wrong in relation to ground 1, I agree with the analysis of the facts undertaken in the joint reasons, and that there would have been a contract in any event.
10. As for the cross-appeal, for the reasons given by Emerton P and Kennedy JA, leave to cross-appeal should be refused.

[2] (1998) 192 CLR 603 ('Unity Insurance').

[3] Leakes Rise Pty Ltd v Leakes Road Property Development Pty Ltd [2022] VSC 440, [18] (McDonald J) ('Reasons').

[6] Pursuant to order 3 of the orders made by McDonald J on 30 August 2022.

[7] Victoria, Parliamentary Debates, Legislative Assembly, 11 November 2009, 3929 (Tim Pallas) ('Parliamentary Debates'). Section 9 of the Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Act 2010 inserted Part 9B, which relates to GAIC, into the Planning and Environment Act 1987 ('PE Act').

[8] Parliamentary Debates (n 7) 3931-2 (Tim Pallas).

[9] PE Act (n 7) s 201RA(c).

[10] See ibid s 201R; Duties Act 2000, ss 7(1)-(2), 10(1)(a).

[11] PE Act (n 7) s 201SF(1).

[16] Ibid s 201R (definition of 'GAIC recording').

[17] Sale of Land Act 1962, s 32A.

[18] Ibid s 32B.

[19] Ibid s 32C.

[20] Ibid s 32D.

[21] Ibid s 32E.

[22] Ibid s 32F.

[23] Ibid s 32G.

[24] Ibid s 32G(2)(b).

[25] Ibid s 32K(1)(b).

[26] Ibid s 32K(1)(c).

[27] Amended defence filed on 22 December 2021.

[28] 5, 7, 11 and 12 April 2022, and 19 May 2022.

[29] Reasons (n 3) [6].

[51] Ibid [55]-[56]. File note set out at [38] of these reasons.

[52] Reasons (n 3) [57].

[62] Ibid [76], citing Gray v Sirtex Medical Ltd (2011) 193 FCR 1; Supreme Court (General Civil Procedure) Rules 2015, r 11.04(1).

[70] [1959] HCA 8; (1959) 101 CLR 298 ('Jones').

[71] (1722) 1 Str 505; [1722] EWHC KB J94; 93 ER 664 ('Armory').

[72] Together with interest on that sum at the rate prescribed by the Penalty Interest Rates Act 1983, calculated from 7 April 2022.

[73] Together with interest on that sum at the rate prescribed by the Penalty Interest Rates Act 1983, calculated from 20 April 2020. This figure appears to be in error as the sum of the wasted agent's commission ($454,545.54) and legal fees ($6,816.39) is in fact $461,361.93.

[74] Insurance Contracts Act 1984 (Cth) s 28.

[75] Unity Insurance (n 2) 609 [9].

[77] Ibid 649 [117] (citations omitted).

[81] Ibid 651 [122] (citations omitted).

[83] Ibid 652-3 [128] (citations omitted).

[101] 'This finding was based on the evidence of an expert in the industry who said that, while he was not sure at what cost or on what terms cover would be given, he thought that cover would have been obtained even after full disclosure of the previous claims. The witness said that the premium payable for the policy in those circumstances "would be a bit higher" than normal. He conceded in cross-examination that not all insurers would have provided cover. However, he thought that a reasonable insurer would have done so.': ibid 611 [16] (citations omitted).

[103] Ibid 613 [24] (citations omitted).

[113] Expressly by Gummow J and impliedly by the judges comprising the majority.

[114] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1996) 9 ANZ Ins Cas 61-343, 76,758.

[115] Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; (1986) 160 CLR 1, 7 (Gibbs CJ), 13 (Mason, Wilson and Dawson JJ).

[116] Marks v GIO Australia Holdings Ltd (198) [1998] HCA 69; 196 CLR 494, 504 [18]-[22] (Gaudron J), 514-15 [50]-[51] (McHugh, Hayne and Callinan JJ), 530 [104] (Gummow J).

[117] Unity Insurance (n 2) 611 [16].

[120] [2012] HCA 5; (2012) 246 CLR 182 ('Strong').

[121] Section 5D(1)(a) of the Civil Liability Act 2002 (NSW), which is identically worded to s 51(1)(a) of the Wrongs Act.

[122] Strong (n 120) 190 [18].

[123] [2009] HCA 48; (2009) 239 CLR 420, 443 [55] ('Adeels').

[125] Ibid 440 [43] (citations omitted).

[127] [2013] HCA 19; (2013) 250 CLR 375.

[129] The Court went on to state that '[a] determination in accordance with [the equivalent provision to s 51 of the Wrongs Act] that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused is entirely normative, turning ... on consideration by a court of (amongst other relevant things) whether or not, and if so why, responsibility for the harm should be imposed on the negligent party': ibid 383 [14].

[130] [2023] HCA 31; (2023) 97 ALJR 840.

[131] Ibid 852 [60], citing March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506, 515 and other authorities.

[132] [2020] HCA 26; (2020) 271 CLR 192.

[134] We observe that, insofar as Leakes' loss may be conceptualised as the loss of the chance to have an enforceable contract with the purchaser, and Brasse's case is that there was no chance, Brasse may bear an evidential burden to show that Leakes lost nothing by his negligence: Mount v Barker (A Firm) [1998] EWCA Civ 277; [1998] PNLR 493, 507 (Moore-Bick J) and 510 (Simon Brown LJ).

[135] See Unity Insurance (n 2) 607 [3] (Brennan CJ), 612 [22], 613 [27], 619 [41] (McHugh J).

[136] Jones (n 70).

[137] Armory (n 71).

[138] [2003] HCA 61; (2003) 201 ALR 470, 482 [54].

[139] Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38; (2022) 97 ALJR 1, 13 [38] (Kiefel CJ, Edelman, Steward and Gleeson JJ) ('Allianz').

[140] [1961] HCA 15; (1961) 105 CLR 569.

[141] [1980] VicRp 11; [1980] VR 91.

[143] The costs orders and costs ruling were made on 30 August 2022: Leakes Rise Pty Ltd v Leakes Road Property Development Pty Ltd (Costs Ruling) [2022] VSC 505 ('Costs Ruling').

[144] Costs Ruling (n 143) [16].

[147] This figure is calculated by deducting the agent's commission ($454,545.54) and legal fees ($6,816.39) from the $939,119 retained deposit.

[148] See, eg, Viterra Malt Pty Ltd v Youil [2023] VSCA 304, [42] (Sifris, Walker and Whelan JJA) ('Viterra Malt'); United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15, [124] (Whelan, McLeish and Niall JJA); AJH Lawyers v Mathieson Nominees Pty Ltd [2015] VSCA 227, [89] (Hansen and McLeish JJA, Robson AJA agreeing at [92]).

[149] Viterra Malt (n 148) [42] (Sifris, Walker and Whelan JJA).

[150] (1997) 15 ACLC 1626, 1632.

[151] McCauley v McCauley [1910] HCA 16; (1910) 10 CLR 434, 455 (Isaacs J).

[152] Statement of Claim on Third Party Notice filed on 20 April 2020.

[157] Amended defence to third party notice filed on 23 December 2021.

[162] Amended statement of claim dated 7 April 2022.

[165] Third party notice particulars of loss filed on 7 April 2022. This amount excludes GST given that it was common ground at trial that the GST component of the commission should be excluded: Reasons, [62(i)].

[166] Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613, 629 [24] (French CJ, Hayne and Kiefel JJ) ('Hunt').

[167] Hunt [2013] HCA 10; (2013) 247 CLR 613, 629 [25] (French CJ, Hayne and Kiefel JJ), citing Hawkins v Clayton (1988) 164 CLR 539, 601 (Gaudron J); Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, 527 (Mason CJ, Dawson, Gaudron and McHugh JJ) ('Wardley') and The Commonwealth v Cornwell [2007] HCA 16; (2007) 229 CLR 519, 525 [16] (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ).

[168] Wardley [1992] HCA 55; (1992) 175 CLR 514, 527 (Mason CJ, Dawson, Gaudron and McHugh JJ); Kenny & Good Pty Ltd v MGICA [1999] HCA 25; (1999) 199 CLR 413, 424 [14] (Gaudron J) ('Kenny & Good').

[169] Putting aside the issue of costs in litigating the issues, including the s 32K(4) point.

[170] Heenan v Di Sisto [2008] NSWCA 25, [30] (Giles JA, Mason P and Mathews AJA agreeing); Williams v Pagliuca [2009] NSWCA 250, [58] (Sackville JA).

[171] Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 81-2 (Mason CJ and Dawson J).

[172] Kenny & Good [1999] HCA 25; (1999) 199 CLR 413, 425 [16] (Gaudron J).

[173] Taxation v Reliance Carpet Co Pty Ltd [2008] HCA 22; (2008) 236 CLR 342, 351 [23]-[25] (Gleeson CJ, Gummow, Heydon, Crennan and Kiefel JJ); 68 Bridge Road Land Pty Ltd v GLP Batesford Holdings Pty Ltd [2023] VSCA 325, [53]; Howe v Smith [1884] UKLawRpCh 142; (1994) 27 Ch D 89, 95 (Cotton LJ), 98 (Bowen LJ), 101 (Fry LJ).

[174] Workers Trust and Merchant Bank Ltd v Dojap Investments Ltd [1993] UKPC 7; [1993] AC 573, 578-79, cited by Riordan J in Simcevski v Dixon (No 2) [2017] VSC 531, [15].

[175] Simcevski v Dixon (No 2) [2017] VSC 531, [30].

[176] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, 608 [4] (Brennan CJ), 618-9 [41] (McHugh J), 626-7 [67] (Gummow J), 652 [128] (Hayne J) ('Unity Insurance'); Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, [741]-[742].

[177] Unity Insurance (1998) 192 CLR 603, 608 [6] (Brennan CJ), 618-9 [41] (McHugh J), 626-7 [67] (Gummow J), 652 [128] (Hayne J).

[178] Tabet v Gett [2010] HCA 12; (2010) 240 CLR 537, 578 [112] (Kiefel J, with whom Hayne and Bell JJ agreed at 564 [65]); cf Wodonga Regional Health Service v Hopgood [2012] VSCA 326; (2012) 37 VR 284, 292 [31] (Maxwell P, Buchanan JA agreeing at 300 [70], Harper JA agreeing at 300 [71]); [2012] VSCA 326.

[179] See Lewis v Australian Capital Territory [2020] HCA 26; (2020) 271 CLR 192, 261 [178] (Edelman J).

[180] Ibid 208 [31] (Gageler J), 217 [65] (Gordon J).